DEPOK (eNBe Indonesia) - Finance Minister Sri Mulyani Indrawati said that budget financing had reached Rp621.9 trillion per Sept. 30, 2021. It’s a 20.7% year-on-year (y/y) decline, which shows a consolidation along and the hard work of the Government in balancing healthy spending with COVID-19 mitigation and economic recovery efforts.
The budget deficit declined, as well as the funding for debt payment which significantly declined. The budget financing for this year is set at Rp1,006.4 trillion, so the realization per September represents 61.8% of the total financing target for this year.
Debt financing reached Rp647.2 trillion, declined 20.1% y/y. The budget deficit reached Rp452 trillion for the said period, contracted by 33.7% y/y, equal to 2.74% of the GDP. The Government aims for a budget deficit of 3% of GDP by 2023. In 2020, the budget deficit was 6.09%, and this year’s budget deficit is set for a maximum of 5.7%.
For funding debt, the Government has issued state notes worth Rp666.7 trillion, declined 15.7% y/y, and represented 55.2% of the target this year (Rp1,207.3 trillion). The debt or loan declined 200.4% y/y or Rp19.5 trillion.
Bank Indonesia (BI) also helped finance the budget this year, amounting to Rp142.74 trillion, by purchasing government notes worth Rp87.51 trillion and Islamic bonds or Sukuk worth Rp45.23 trillion.
The realization of the budget for the national economic recovery (PEN) program reached Rp433.91 trillion per Oct. 22, 2021, representing 58.3% of the total PEN program. For healthcare, the budget realization reached Rp116.82 trillion, or 54.3% of the total budget.
The budget realization for social protection reached Rp125.10 trillion, or 67% of the target set on the budget (Rp186.64 trillion). Budget for micro-small-medium business segments and corporations reached Rp63.20 trillion or 38.9% of the total Rp162.40 trillion. And the budget for the priority program reached Rp68.07 trillion or 57.7% of the target (Rp117.94 trillion). The budget for business incentives reached Rp60.73 trillion or 96.7% of the target (Rp62.83 trillion).
Sri Mulyani also reported that the state revenue reached Rp1,354.8 trillion per Sept. 30, 2021, or 77.7% of this year’s target (Rp1,743.6 trillion). It grew 16.8% y/y. All sources of revenue have recovered or rebounded, a good trend of consolidation even though the situation remains dynamic.
In detail, tax revenue or collection reached Rp850.1 trillion, representing 69.1% of this year’s target (Rp1,229.6 trillion). It grew 13.2% y/y. Customs and excise tax contributed Rp182.9 trillion, and non-tax revenue contributed Rp320.8 trillion.
In addition, Sri Mulyani expects the national economy to grow by 4.5% in the third quarter (Q3) of 2021 and 4% growth for this year as a whole. In Q2 of 2021, the country’s economy grew 7.1%. The Delta variant of the virus SARS-CoV-2 caused economic growth to slow in Q3 this year. The economy, Sri Mulyani added, would rebound in Q4, but concern remains on global risk escalation, mainly affected by the economic rebalancing program in China.